SentimenTrader Blog

2020-01-27 | Jason Goepfert | Daily Report

Retail investors have rushed back into the market with frenzied trading activity; Last week saw more than 10% of S&P 500 stocks trigger a buying climax; Other recent viral outbreaks saw sustained weakness in commodities; The Dow Industrials turned negative YTD; The S&P 500 tech sector was just up 14 out of 17 weeks

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2020-01-27 | Jason Goepfert | Lite

Lagging leading indicatorsThe Conference Board’s Leading Economic Indicator model is showing its worst growth in years. After the month-over-month reading in the Conference Board’s Leading Economic Index turned barely positive in November, it dropped again in December, with the worst reading in years.This ends one of the longest streaks of “not bad” readings since 1959.When a long streak of readings higher than this finally ends, and when the LEI m/m is so negative despite stocks being at ...


2020-01-25 | Troy Bombardia | Premium

After rallying nonstop for weeks and weeks, the S&P 500 finally came close to its -1% day (on Friday) for the first time in months. Is this the start of the long anticipated pullback? While it's impossible to know for with 20/20 hindsight (there is no holy grail in the markets), short term bearish evidence continues to mount. Here's my market outlook:Long term risk:reward (e.g. 1-5 year basis) doesn’t favor bulls. Valuations are high, but valuations can remain high for years before stocks ...

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2020-01-24 | Jason Goepfert | Daily Report

The Leading Economic Indicators month-over-month change ended a long streak above -0.3%, especially odd given the S&P's at a new high; The Russell 2000 and Dow Transports haven't hit new highs in more than 335 days; The S&P lost more than 0.9% for the first time in months; It hasn't suffered back-to-back losses in 30 days; Hedgers are still shorting commodities, platinum

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2020-01-24 | Jason Goepfert | Lite

High return, no riskOver the past three months, the S&P 500 has sported a good gain. More impressively, it has come with almost no risk, as the standard deviation of its daily returns has been exceptionally small. Its return was more than 25 times its standard deviation, making the past few months among the best-ever for trend-followers.Going back to 1928, there have been few times stocks hit new highs with such a calm and positive three months. Creeper uptrends like this can run over bouts ...


2020-01-23 | Jason Goepfert | Daily Report

Over the past 3 months, the S&P 500's return has been more than 25 times the standard deviation of its daily returns; There has been a jump in new highs, stocks outside their Bollinger Bands, and overbought in defensive sectors like utilities, staples, and health care; Intel is slated to gap up after earnings when the Nasdaq is already at a high; The NAAIM survey is the most bullish since 2006

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2020-01-23 | Troy Bombardia | Premium

Here's what I'm looking at:Low volatility (continued)As I mentioned 2 weeks ago, the S&P 500 has gone many days without a +/- 1% daily move. From a slightly different perspective, Callie Cox noted that the S&P has now gone 29 days without a back-to-back daily decline:Such low volatility (particularly downside volatility) usually led to a pullback in U.S. equities over the next month, particularly from 1950-present.Here were the S&P's drawdowns over the next month:Bollinger BandsFrom a mean ...

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2020-01-23 | Jason Goepfert | Lite

Right-way writersNewsletter writers have been predominantly bullish for more than 3 months, a good thing given how stocks have performed. Their Bull Ratio has now been above 75% for 13 consecutive weeks, the longest streak since the end of 2017, and one of the longest stretches in 50 years.It’s not a huge surprise that forward returns after similar streaks weren’t great. The S&P’s average across all time frames was below random, significantly so over the next year. More troubling is the ...


2020-01-23 | Troy Bombardia | Public

The Stochastic Oscillator (also called "Stochastic indicator") is an indicator that seeks to understand how strong the market's momentum is. The market is overbought when the Stochastic Oscillator is very high and the market is oversold when the Stochastic Oscillator is very low. Unlike RSI which uses the market's daily movements, the Stochastic Oscillator looks at the market in comparison to its recent range. In this post I'll show you EVERYTHING you need to know about the Stochastic ...


2020-01-22 | Jason Goepfert | Daily Report

The Bull Ratio among newsletter writers has been above 75% for 13 consecutive weeks, one of the longest streaks in 50 years; Fewer than 10% of stocks in the S&P 500 are in bear markets for the first time in over a year; SPY hit an intraday record high for the 10th straight day

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